Русский RU

Individual Investment Account for private investors

To increase securities market attractiveness, Russian government to introduce new taxation rules for domestic tax residents, aiming to stimulate local investment demand. Starting from 1 January 2015 Russian authorities are planning to implement new legal conceptions – "Individual investment Account" and "Investment tax rebate".

Individual Investment account (IIA) is a special brokerage or AM account with newly introduced tax benefits aiming to stimulate private investors.

Individual investment account established and maintained by the broker (brokerage account) or the management company (through trust management) under a separate agreement for brokerage services or asset management agreement.

An individual can choose one of two account types: Individual Investment account with tax rebate at the rate of 13% of cash contribution (type А account) and Individual Investment account with zero income tax for capital gain (type B account). The main condition for getting tax rebates – existence of account not less than 3 years.

When using Type A account, an investor can return annually paid tax on personal income in an amount not exceeding 52,000 rubles. (13% of 400 thousand rubles annual contribution).

When using Type B account, investor can exempt from taxation all the positive financial result obtained in IIA.

The owner of IIA can only choose one type of tax rebate, their combination is not allowed. If contract is canceled on running IIA before 3 years from the date of conclusion investor will not be eligible for investment tax rebate and received earlier tax rebates must be returned to the state.

The amount that the investor shall transfer in a calendar year under a contract of IIA may not exceed 400 thousand rubles. The number of years during which the investor will transfer funds is not limited.

More about Individual Investment Accounts